tv Key Capitol Hill Hearings CSPAN March 12, 2015 12:00am-2:01am EDT
activity plays a huge role in that. the consequences of doing nothing could be dire and expensive. do you agree with the milwaukee journal sentinel on that? >> thank you for the question. my role as a regulator we ensure reliability of the grid. i did not or do not endeavor to take on the policy behind what is before us. my role has been analyzing it and the rules that come before us. i look for three things. the environment a to rule this coming does it compromise the affordability, the safety and reliability of our great? that's the lens that i looked through this rule. >> no amount of our mental costs would figure into your analysis then. >> no, that's not what i said. see that that's exactly what you said.
>> the environmental rules cannot unduly compromised their reliability. >> no matter how great the environmental cost? >> there is a balance that needs to be struck. >> how do you strike that balance if you don't know whether climate change is happening and whether human activity plays a huge role whether the consequences of doing nothing could be dire and expensive which i assume expensive is a word they would fit into that calculus. >> we look at what the impact on our ratepayers would be in the benefits to the environment under the proposed rule. >> but the impact on your ratepayers could be felt through climate change as well as through the rates that they pay could they not? >> and that's not part of what you looked at them part of your analysis? >> the benefits have been put forth by the epa in their plan and we are weighing the costs against the benefits that the epa has proposed.
>> for what it's worth the executive director of the wisconsin business alliance has called energy and economic opportunity that will quote results in job creation and cleaner and a quicker path to independence. she said we should look for opportunities to promote jobs and the environment and big clean power plan is a good way to do that. mr. parfitt rocky mountain power power's owner is a spokesperson for rocky mountains owner says multi-approaches are less costly way to make that clean power plan's targets. the "star tribune" is said and i will quote the montana officials have held earlier discussions with other states about the prospect of corporate in to meet the epa's targets consistent with what the rocky mountains --
they have thus far rejected regional advances. montana which is also a rural state that generates a significant portion of electricity from coal has come up with five draft options for complying with the proposed standards including options that would not require montana to shutter its coal plants. if montana can do this why can't wyoming and montana will work with other states why won't wyoming? >> well, first i will address montana's five different alternatives. in their alternatives they assume that they will get credit for 100% of the wind energy and that's not what we have been or has been conveyed by epa. we were told that we would get no credit for wind energy consumed outside of the state so that's one difference. as far as the multistate discussions, i will say that we
have been involved with the same group the center for new energy environment and participating in those conversations along with montana and 13 other states. there are challenges with the multistate plan particularly when we don't put no with ankle is going to be. all we have right now is what has been proposed. we don't know how epa is going to change the proposal based on the comments at them and receive so we don't know what the targets are going to be. >> do you agree that climate change is happening that human activity plays a huge role in it and the consequences of doing nothing could be dire and expensive? >> i'm here to talk about the clean power plan and whether or not we are going to do something to address the co2 emissions whether or not this is a good plan and is a workable for wyoming and the answers is not workable for coming.
>> the respective of the amount of damage the co2 might do there is no harm that could cause you to change her your point of view on that? >> not on the proposed plan and what that does two plans. >> very well. finally mr. easterly halev you built the costs of climate change for indiana into your analysis of the value of the clean power plan? >> i don't think you can quantify any cost to future climate change on the state of california. >> why do you not think you can quantify? is that not part of your job? >> there's nothing concrete to quantify. >> have you read that a 223% likely energy costs could come?
>> this is from the clean power plan. >> this is in increase pulling load. you are not familiar with that report obviously. >> not that one. >> when you are talking about the cost of electricity are you talking about per kilowatt hour? >> yes. >> let me say if i could and i'm sorry to go over but can i make a point of? it's very brief. >> how long is the rhode island point? >> less than a minute. average monthly ills of residential customers in wisconsin or $95.21 and indiana $110.44 and wyoming $90.84. in rhode island they are lower than two of the states. even though her kilowatt hours costs are higher because we invested in energy efficiency and status figure that bought matters in the pocketbook. >> thank you very much mr. chairman.
first to ms. nowak is affordability reliability and safety the three that you consider? >> correct. >> mr. parfitt just to review when it comes to have the epa credits renewable energy wyoming which produces a significant amount of renewable energy still stands to be severely disadvantaged. you talked about how much wyoming could produce in terms of wind energy and he said 85% of wyoming's wind energy is exported to a number of other states and i heard chairman nichols say california wants to buy even more wyoming wind energy but the epa has said no renewable energy is going to only be credited to the state words consumed not where the energy is creating the hosting state which means wyoming gets no credit for the wind energy at
develop so i appreciate senator carper saying that needs to be addressed. my question is how will this impact wyoming's ability to obtain our emission target and how much additional renewable generation would we have to develop just to meet the epa's proposed target? >> this makes it difficult for wyoming to achieve its target. he has met over new rules would be somewhere around 9 million megawatts of wind energy that would have to be developed for us to meet our target. right now wyoming consumes 600,000 megawatts 600,000 megawatts of wind energy. that equates to about a 14 or 1500% increase over nobles that wyoming uses right now. >> and you mentioned a lack of flexibility from the epa. in giving wyoming what we would need in terms of continuing to produce a lot of the renewable so you mention more than half of
the land in wyoming is federally owned and this has a significant impact on the mandates coming out of the epa. your reference to permits to the esa requirements for which wyoming has absolutely no control and it doesn't seem the epa is proposing any sort of relief and plans to address these and you specifically said only one sixth of the total area of the epa has identified for wind energy development is actually available for wind energy development. sage grouse and permitting requirements for it seems the epa is telling people in wyoming to move faster and renewable energy while refusing to acknowledge washington's foot is still on the regulatory breaks. can you go into more detail about how federal landowners and the red tape that goes with developing energy resources on that land is a washington
roadblock that the epa ought to address if they want wyoming to develop cleaner energy faster? >> guess on what we have seen for wind energy projects we have to go to the nepa process. they have taken anywhere from four to eight years to be approved to the nepa process and then there's an additional fish and wildlife service process for eagle permits. those only those will add to the time involved in the other piece of his transmission. you have to have transmission to move the energy out of the state and those right now we have two projects that are taken up to eight years to get through the permitting process and they are still in that process now. >> we had previous discussions and debate and votes in the energy committee under democrat controlled senate in the past and democrats specifically voted to block transmission lines on
the public lands which half of the wyoming land is public land so i think that is played into exactly what you are talking about as well. >> that is correct. >> also talked about the potential closure of four coal-fired prior -- plants and according to the wyoming public service commission. that is lost investment and who knows how much it will cost to replace the lost power. that will be past time i would assume to citizens within the six state territory of pacific core and a senator whitehouse asked a specific question about pacific core. would that mean that folks not just wyoming to california washington state oregon idaho and utah are all going to get a big new energy tax increase because of what the epa is trying to do in closing those for power plants in wyoming
having to build new plants and am i correct in characterizing characterizing what you are saying? >> that is correct. those costs would be distributed amongst the states involved with that system. >> california would have higher electric bills as a result of the epa mandates here? >> there's a portion of northern california that's part of that system. >> a growing number states are raising concerns of a new type of implementation worked out with epa is immediately going to become federally enforceable making the state vulnerable to sue in civil lawsuits between environmental groups in the epa but unlike most subtle arrangements which do deal with the single plan under epa's powerplant rule a states entire electricity system could become subject to environmental lawsuits. epa agrees with this concern. during question and answering at an event in february the acting chief jana mccabe being
subject to third-party lawsuits if they submit state implementation plans. we have heard of the texas public utilities commission are as well. i guess mr. chairman if there is time to ask a couple of folks on the panel if so deeply the epa can promise some sort of protection against these lawsuits and what are you saying? >> we think the very foundation of this proposal intrudes upon states rights and to have any state plans subject to federal authority is a great concern of ours. i think studying energy policy should be left up to the states in conjunction with the department of energy and not set by the environmental protection agency. we have great concerns about losing state authority over any of our testing testing laws. >> mr. easterly? >> we do not believe the epa can protect us from lawsuits under the clean air act. they can happen and they do.
>> we don't believe we can be protected from the lawsuits from third parties with a state plan as a proposal has been written. >> mr. chairman i'm out of time. thank you very much. >> thank you. senator fischer. >> thank you mr. chairman and thank you all for being here today. commissioner easterly when we have the acting administrator ms. mccabe here earlier in the year i asked her some questions about the heat rate efficiency assumption for building block one. we no epa relied on the one the analysis for that 6% heat rate. in their own terms they said the epa has supplied the data and accumulative manner inconsistent with how the study was conducted. do you have any other concerns with how the epa developed that
6% heat rate assumption that is out there? >> part of epa's thought process for building block one assume you would operate the plants in a way that gained efficiency which really means you have to operate at a steady state output but then we have building block to which says your coal plants are the last resort. you must operate your combined gas plants first and use the coal plants to make up for swings in renewables and gas and that which is make it much worse. there's also mission controls that you have to add on to the coal plants which are good reasons to be there but they all decreased the efficiency of the plant because this rule is based on megawatt outputs and there's a huge specific load for controlling emissions. they're a bunch of reasons that the plants are going to a less efficient on a one-hour basis than more efficient. >> do you think improvement is
achievable in your state? >> i think we are hoping and hoping is a strong word that we might be able to get 2% if everything was done that could be done but it is a serious challenge. anything that is cost-effective you have a reason to do it anyway if you are the utility because you make more money so the things that are left will only be cost-effective because the cost of not doing them under this plan is more expensive than the incremental thing you will get. >> that's exactly right and would compliance with other environmental regulations would that have any impact on your state's ability to meet that 6%? >> it will because we still have some utilities that are going to have to add more energy per as the two reductions that aren't there now so that will decrease their efficiency as is
calculated under this rule? >> you know i support and all of the above energy policy and many of my colleagues on this panel also support and all of the above that we need to have the balance in her energy portfolios. i think that's extremely important for a number of reasons, security reasons, cost reasons, it's the wise thing to do. do you think that this clean power plan encourages diversity within our energy sector? >> not in the long run. in the long run it basically is the plan to continue to shut down coal-fired power plants and as natural gas and renewables and those are fine sources of energy but if you've ever been in business once you get close to a monopoly you have pricing power and that gas suddenly won't look like it does now in price.
when i worked in the utility industry foreshore period of time we had a natural gas price spikes and it was very disruptive to all of our customers. i'm worried that those are going to happen in the future. >> let me go to another panelists first and then i will ask another question. mr. parfitt do you think we are encouraging the states to look at a balanced portfolio when it comes to their energy needs with this plan that is before us now? >> from our view the answer would be no. it seems like the purpose is to go to read dispatch of other types of energy sources to replace coal and so it's not looking at a mix. it's really aimed at reducing coal. >> you know i'm from the only public power state in the country.
nebraska we rely on our public power. it's a strength for our state. it's a definite strength for our ratepayers. we are very concerned the impact it's going to have on families across our state when and if this plan is implemented. we rely on our coal-fired electric plants. we have diversified portfolios. we continue to develop those but to have a requirement, a mandate to have those implemented i think in an unreasonably short period of time will affect families and it will affect our most needy families. mr. parfitt how do you view that in wyoming? you are our neighbors to the west. how are your families going to see what's coming to them? >> we share the same concerns in terms of what the proposal will
do to utility rates. particularly with our compliance pathway as we see it. we would see an increase to the premature closure of coal plants and the stranded assets associated with that. >> and ms. nowak in wisconsin i don't know what you're energy portfolio looks like in your state but i would assume that some of your ratepayers won't be pleased when they get their bills. >> not at all you are correct senator. our ratepayers have invested over $11 billion to clean up our air. that is continuing to be paid for and are free of reduced emissions by 20% if you look at 2005 as a baseline. they have done that. we are not getting credit for it. we are a predominantly coal state like indiana a heavy manufacturing state. this will have a very large impact between our modelers
between three and $13 billion just for generation alone. that doesn't include any natural gas infrastructure transmission infrastructure that needs to be done so that will hit every ratepayer from the low income to our large manufactures. >> it will hit every family in wisconsin and across this country. >> thank you mr. chair. >> senator sessions you were the first one here in the last to speak so you are recognized. >> kind of like a budget hearing committee. it makes us all nervous. well mr. easterly i came here and i remember thinking i don't like this idea that there needs to be a mix of sources of power. we should have more nuclear power. that was my simple was my supply the evidence i have seen the arguments i am of the believe that if you become too dependent on one source of power you are
not able to have a competition that keeps costs down do you believe that's still a valid concern? >> yes and ironically we don't have any nuclear. i would love to have some but it's hard to build it as you know. it's not likely to be coming in my lifetime. >> it's disappointing i've got to tell you. natural gas rates have fallen and the cost of plants are up and the nrc is more regulatory than ever. it's almost killing it off which would be a disaster. i think the unifying issue that we can all agree on republicans and democrats is more healthy environments. let's particularly less mercury and things that make people sick or kill trees in that kind of thing. i think we can do better about that and in the course of that i think we will have the benefit of co2 emissions probably the same time.
i am not -- to press down on my constituents billions of dollars in costs over the co2 issue frankly. we just need to balance this out and be reasonable about it in my opinion. i believe you said ms. nowak that you believe that these regulations passed the cost of electricity will go up. mr. parfitt in your state do you think it would go up also? >> yes, that is correct. >> and mr. easterly? >> yes, we just aren't sure how much but more than double. >> ms. nichols do you believe it these past and i'm not sure what you said. >> there has been a trend over decades for the cost per unit of electricity to go up but what we
think is important is the bill, what the customer actually sees sees them in that event we are holding steady. we are able to hold that steady. >> even if these new rules are passed? >> i believe so. >> mr. myers? >> i concur they can reduce current emissions and keep electricity prices down. >> now ms. nowak you indicated that we spend a lot of money, if you spend a lot of money to make coal cleaner than it's ever been before and of those plants are closed are you saying those are the stranded costs and lost investments that are damaging to the ratepayers in your state? >> correct. the cost for new generation only. it doesn't take into account
paying for units that have been recently built and our power plants are paid for over many years so ratepayers will be paying for plants that are run much less while at the same time paying for new electricity so yes. >> and mr. easterly i would ask you to see if you can say yes or no on that too but let me ask a simple question. it seems to me that mandates, regulations on the drive up costs and an economic sense are the same as raising taxes and having the government doing it. in other words the government can raise taxes on everybody in and pay for cleaning up power plants or whatever they want to do to achieve a certain goal. so i just want to translate this into reality for the people who are buying electricity
businesses and homeowners and people like that so these mandates require greater expenditures to produce electricity are the equivalent of a tax on their lifestyle. isn't that correct? >> yes it is the different people benefit and don't benefit so if you are regulated utility that makes a profit if the price goes up your% of profits is the same. if you are an rem seed co-op your customers are your owners and they really see it and there is no net benefit there. >> while i think that is the question, is the tax on the economy were to benefit that is achieved. [inaudible question] dr. longboard from the copenhagen institute said that increasing co2 over the next 60 years is not going to be a
detriment to the world. in fact it will be a net benefit benefit. he will agree that if this continues out into the next 150 years you begin to have a cost of the questions some of the expenditures we were talking about today. i just believe that the fundamental thing you talked about how many lives could be saved with a fraction of these costs that will affect people in a lot of different ways. thank you mr. chairman. i appreciate this hearing and the good witnesses we have had. >> thank you senator sessions. senator boxer wanted to have a moment to enter something into the record so we'll recognize you for 30 seconds to do that and me for 30 seconds or and then it's over. >> it's never over. okay mr. chairman i ask unanimous consent to be placed into the record a very important chart that shows californians
are paying $20 less per month for electricity than the national average as we reduce carbon pollution isn't such a great way and i'm so grateful to ms. nichols were playing a role in this. >> without objection so ordered. in my 30 seconds, two documents one from the census bureau this is california has the highest u.s. poverty rate comparing income to the cost of living across the state and secondly from the manhattan institute migration from california to oklahoma increased by 274% in the 2000's. >> you are lucky to get us. >> with that we are adjourned. [inaudible conversations] [inaudible conversations]
>> good evening, everybody. so great to see every one of you. the jam and i am about to talk to and introduce also needs no introduction. he is is as someone at our table said, the men of the our. i think he is a man of courage and i and i think we all applaud his service and his creativity and the inspiration he has brought with his current service at the federal communications commission. we are all excited to hear what you have to say command we are grateful for your time with us tonight. please join me in welcoming chairman tom wheeler. [applause] >> hello. >> how are you doing?
>> a couple of friends over. >> just a couple of friends. >> having a good time. >> great to be here. >> thank you for joining us. you have been busy. >> no. every day at the fcc is like sunday on the farm. quiet laid-back, you know a great time to be there right now. >> net neutrality, mergers, options. really? >> how fortunate can you be to the end the middle of the greatest network revolution of the last hundred 50 years and i no that fellow
commissioners are here tonight, and i think we feel the same way that we are incredibly blessed to be at this time in history. it is funny. when the president asked me to take this job i was writing another book on networks in history. and i was operating on the thesis that there were four great network revolutions and history, the printing press, railroad, telegraph and now today. and all of a sudden we get to move from looking at it academically to living it. i mean, it is a great
privilege and opportunity command these are really exciting times, as you know. >> we are living exciting times. how you reminiscing? you said publicly that you thought the day of the net neutrality that was the proudest day of your career. why is that? >> well, you know, i guess before i answer that i need to say one thing. i hope that it was a proud day for you and cdt as well because the leadership that you showed the thought leadership that you showed and that cdt had on this process was really important. and -- [applause] i agree. [applause] and i have been fortunate enough to be kicking around
the policy circles for the last 40 years. and the comment i made was that it was the proudest moment of my public policy career. let's face it as we were talking a minute ago what we are dealing with right now is the most powerful and pervasive platform in the history of our planet. and how are we going to deal with it? the exciting thing about history is watching how economics and society dealt with the changes in network technology that were affecting the very fabric of life. that is the challenge that
we face on this issue. and it makes no sense to have this incredibly powerful platform without having a set of ground rules and without having somebody on the field who can throw the flag if the ground rules are broken. and that is what we were trying to do with the open internet rule, and i think we succeeded. [applause] >> anything you want to tell us about the role? [laughter] >> the problem is that i can talk about the open internet rules through the main cause of desert and the coffee course. you probably might want to
talk about something else. i don't know. >> you no i spent most of my career on privacy. most of us on the privacy side of the house are worried about the classification and what that means with your relationship with the consumer and privacy online, the fcc. tell us more about what your thinking is. >> i no that the chairman is here and several other of the commissioners from the fcc. one of the things that the chairman and i have been working on is making sure that our two agencies which frequently about an authority are working together i expect i expect that we will see that continue on the privacy issues. the fcc has done a terrific job of dealing with privacy issues. is jerry back they're? [applause]
but the other part about it is that we did not just fall off of the turnip truck. and, you know for the last couple of decades the fcc has had responsibility for telecommunications carriers and privacy issues. and we take that responsibility seriously. i think that we have exercised that responsibility diligently and now we have that the responsibility of saying okay in this new -- newly structured environment, what do we do? the 1st thing we're going to do is come up next month we are bringing together various players. i am sure you will be a part of it. to sit down and say, let's big ends focusing specifically in a workshop on what needs to be done post open internet order to deal with broadband privacy
issues for the newly classified telecommunications service providers in broadband. but this is not a secondary activity or and, oh, by the way, kind of thing. privacy of thing. privacy is an important issue for us and we will remain. >> i think that is good. >> so the rules that we know of them were different than where we started. there is there are a few zigzags on the way. tell us about some of the moments, pivots, influences how you got to where you are >> the interesting thing about the rulemaking process is i think most people think of it as some kind of a rigid, turgid process when actually it is quite fluid. and one of the things that i tried to do ever since i
came in was to say that we would not put out something that did not have a set of rebuttable presumptions ended in terms of really where we thought we are going, where we wants to be going. too often in prm's it's tell us what you think about. and it is hard for commenters to know where to focus. so we focus. so we said hey we think section 706 is a -- is a way to attack this problem and reinstate the 2010 rules and we asked specifically asked the question should title ii be used as a better alternative i think we got an answer.
and we learned a lot through this whole process. thanks to gg who is here someplace. [applause] i want to join in that applause. [applause] so you know i guess i we will say it the way i see it. she dragged me around the country to meet with various consumer groups, innovators financiers the public and to engage in a dialogue. and the thing that i learned in that process and through filings like yours and others is that the basis of section 706 and a test the
test of commercial -- commercial reasonableness, i thought i no. when you start looking at putting commercially in front of the word reasonable it can lead to very different outcomes and if the -- if the interpretation of this relatively knew concept was to be what is reasonable for commercial networks rather than what is reasonable for elevators or reasonable for consumers that was the wrong question in the wrong answer. and so it was based on the fact that i started saying we need to look at the reasonable test which
existed title ii and combining title ii and section 706 to have a one _-dash to punch. it is a fluid process. and i think that the result of that kind of a fluid process, that kind of listening and learning has produced a far better outcome. >> the public is concerned and fiber has reemerged as the hot word of the month is there going to be some kind of constraint on broadband provider ability to import of cyber security threats. very worried about a new claim? we are concerned about it obviously.
>> one of the fascinating things -- and you know having spent a lot of time lobbying the fcc, congress -- >> you did that? >> one of the fascinating things i i experienced almost every day is sitting in my office and remembering the times i walked into the office and pound the table and talk about impending doom if you didn't follow what i wanted to do. i become inured when i here santana thing. one of the thing opponents of open internet if you are going to been blocking you are going to not allow us to block speed outs and other kind of evil things that are happening. baloney. [applause]
i i mean let me be clear. let me be clear. we are talking about protecting lawful content. okay? not unlawful content. and that the security of our networks is right alongside the openness of our networks in terms of the priority that we should be responsible for and worrying about. insofar as korea is concerned, i was around at the birth of clear. it has always been a balancing act between privacy and security.
>> are we spending a little time up they're. what are the prospects for moving forward in a collaborative way? >> first of all, they are the congress. okay? they write the laws. what we were trying to do was to implement the statute the congress a given us. it's always within congresses purview to say hey, timeout, i want to zig left instead is a great. and, you know, i think that i have a good relationship with the leaders. leaders. it does not mean we always agree, bleak can have open and direct conversations, which we do i am interested
in what they are interested in, where they want to go but at the base of things i think that we have in a three to two vote two weeks ago established the gold standard for what open internet protection is all about. [applause] >> you have 22 months left. what else were else would you get done? >> who's counting. [laughter] >> sitting out here. twenty months left. twenty-two months left. so i think there i think there are a couple of things. number one, i -- there are four goals.
unleashing the power of broadband. it is one thing to talk about broadband. but talking about broadband is like saying railroad, railroad, railroad railroad. it is what the railroad enabled that was important. we have to finish in terms of modernization. there is access for those in challenging situations where in rural america or economic limitations that keep you from having access. we have to look at the evolving market in terms of over-the-top video m the pd, this sort of thing.
i have been adamant from day one we have a responsibility to make sure that this new technology is being used to attack the challenges of americans with disabilities. there are knew capabilities that are made available by ip and we need to make sure. that is one, how you unleash. if the network of the 21st century is wireless you have to have enough spectrum we have all seen the studies about the demand and where that is going. obviously we just finished the in us three. the action coming up next year.
high-speed wireless access and we have got lots of things we want to do in terms of that. number three is maybe you have heard competition competition, competition. competition is the consumers best protector and the innovators best friend. no question of transit -- transitioning from analog networks, it networks a whole raft of challenges the 4th issue we have already discussed his public safety and national security.
we have got to have 911 systems that work. we just, you know, put in place a set of rules that provide for location accuracy for wireless subscribers. you have to ask yourself the question why is it we are looking six years down the road: the standards going to affect when today i can use uber and a comes to my house? how do we have over 911? we are going to have a workshop in april where we will be talking, bringing various players together from the applications community as well as for the wireless community and the public safety committee to talk about how we build a standardized infrastructure with open api so that
creative application developers can build something that will interface with a common access to the equipment that is used. and so we have got to think our way through. twenty-two months is a short amount of time. >> die trying. >> you better get home and get to work then. >> thank you. [applause] >> coming up tomorrow here on c-span2 we will be live in new hampshire for more of our continuing road to the white house coverage. see remarks from former texas governor governor rick perry who is in manchester for a politics event.
club for growth president discusses his group for congress and how members vote on economic and limited government legislation. after that, will marshal of the progressive policy institute will talk about the recent policy agenda plus plus phone calls facebook comments, tweets. washington journal live each morning on c-span. >> featured programs for this weekend on the c-span networks. saturday at 1:00 p.m. eastern, c-span2 book tv live from life from the university of arizona for the tucson festival of books featuring discussions on race and politics, civil war, in the nation magazine writers with collins throughout the day.
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>> this hearing will come to order. in 2012 congress stbestablished first net for america's first responders. today's hearing will examine the challenges and the problems they are facing as they move forward with building a platform for the country's emergency personal. the spectrum act has been enacted and we are on the way of releasing our draft for proposals but we are a long way away from having a public safety network. there are many things that can go wrong unless decisions are
good made. the rfp gives us a sense of whether a network can be build in a cost effective way that secures future generations. they must work to make themselves a self-funding entity. we are con fronted with many pressing and unanswered questions due the complexity of establishing a system. stakeholders have questions about what first net means for them. there are concerns about how much network access cost local police and fire departments dealing with constrained budget. and it is competitive and many wonder if is going to be better than what first responders currently use. feminist first net is aware of these
issues. last year, we will hear from mr. gold goldstein about the problems they find and hopefully we will take the views to build the network. i also ask first net to implement a detailed plan building upon the valuable lessons learned from the earlier projects. without a plan first net might not take advantage of the sizable investment that has been made. in the inspector general released a report that raises the ethics and concerns and practice. i look forward to what he have learn and if the i g's finding have been addressed. the department of commerce is at a crucial stage and should ask
if they are being the best partner and facilitating a safety network that will make us all secure. being an independent authority there is risk and first net was asked if they are on the path becoming like the obamacare website that failed during the rollout. the challenge of setting up this network is many times grater. i encourage to department to learn from the many mistakes of the health care website. first net has many answers they need answered to be successful. to which degree will the first responders wish to join a network? what is the value? who exactly will be permitted to use the public safety network?
as this committee proceeds with oversight of first net i will focus on if a high quality and useful network can be offered to first responders in rural america. they will be a failure if they leave populations uncovered. we have an experienced and knowledgeable panel today and i expect the testimony will provide insight with the issues i have raised. i will yield to the senator from florida. senator nelson. >> i know the committee members would like to hear my tones but i would prefer to hear the witnesses so i will enter my remark for the record. >> very good. we will get underway. i want to start by introducing our panel today. first we have bruce andrews who is deputy secretary at the department of commerce and brian
is next and he is the fire chief of the oklahoma city department. and mark goldstein who serves at the government account lit office. susan swinson who serves as the chair woman of the first responder network authority also known as first net. and mr. todd zinser who is inspector general to the department of commerce. we will start on my left and your right with mr. andrews. if you can keep the comments con confined to five minutes. >> good morning chairman ranking member nelson and member of the committee. thank you for having me testify. i worked on the staff of this committee when senator rock feller and hutchinson conceived of safe net and this mission
erose in the wake of the 9/11 attacks when the work of the first responder was impaired by the problem with communication. we are proud of ow role helping to stand up and support this program. this is a difficult mission but we are confidant first net is making strong progress toward meeting its goals. a nationwide first responder network will enhance safety public communications across agencies and jurisdictions. first net is an independent authority within the national tell communication and information administration to develop and maintain this network. this is one of the most significant initiatives and it is challenging the self sustaining world class network within the government. that has challenges suffice to
say. the department supports and oversees first net. senior leadership from the department, nti and first net meet on a regular bases to discuss the status milestones and potential risks. now it is maturing it depends less on our staff in day to day activities but we continue to offer support and guidance to first net and its strategic development. secretary zinsor and are i committed to this. we developed a strategic road map in the cost model and val dated by outside experts. we provide legal, human resources and administrative support to first net where they don't have tlar own resources or direct authority. in doing so we seek to streamline and expedite federal
policies. we work on statutory compliance internal controls and annual audits. ncia ad ministers the state grant program as well. in december, the department's inspector general issued an audit report regarding the management of concern reports and monitoring of certain contracts. we appreciate the attorney general general's effort and took the matters seriously and conquered with the recommendations and took a number of step do is address them. it is important to emphasis the report focused on the early operations and highlight the department's full effort on these matters. first net needs public and private sector board members with deep technical experience in wireless broadband communication. to get such board members it was
likely they would retain interest and affilations with the industry thus creating a need to consider potential conflicts of interest. the department anticipated this through a robust program that worked to counsel people regarding their employment and financial interest. some administrative requirements may not have been filled board members made the necessary disclosures. the inspector general's report didn't show violations ofb conflict of interest laws or decision making. it is important to note the first net contracts resulted in valuable work product that is critical to the rapid establishment of this organization and to your point about getting this out as quickly as we can. administrative errors were made and the department took them seriously. for example, we are implementing
review of financial disclosure reports and increasing potential conflict review and working to ensure that employees receive appropriate ethics training. first net has grown significantly and it is in a stronger position to exercise their own governance oversight, provide clear direction and structure for the organization. i think it is important we emphasis appreciation to the private sector board members because they are making significant sacrifices in an important goal and trying to do it the right way. first net is achieving its mile stones relate today state and public comment. it is fully funded due to the proceeds from the fcc's resent auction.
we understand some deadlines have not and will not be met. none of that underlines the word being made by this terrific team. creating a public safety wireless network is a major undertaking. we take our responsibility tr the project seriously and we will continue to help ensure that first net succeeds. as you can see first net is making strong progress toward their goals. i appreciates your time and welcome the questions. >> chief brian?
>> i would like to thank the board for allowing me to come talk about the progress made by the first responder network authority or first net. anita haidaryfirst net's goal is a matter of critical importance for public safety. the task will not be easy, the ifc believes they are developing what is needed from stake holders to make this network a reality. as a fire chief and firefighter who responded to natural disasters and major acts of terrorism i know first hand the benefits of the first net will offer in terms of improving coordination and response during
these situations. first net devices and applications will ultimately change the way local fire and emergency medical departments operate. the first net network will make it possible to gain access to tools that provide location data and other vital information for fire fire fighting. it will enable real time data exchange to assist commanders with operation al decision playing making. the first net will make profound changes in how emergency service is pract practiced.
the first net network will facilitate critical decision making in real time and help save lives. under emergency conditions the networks become overwhelmed and we experienced this in oklahoma city 20 years ago. the full deployment of first net will ensure first responders can access vital information under all emergency conditions. i think there was uncertainty from public safety after first net was formed that the concerns are not being heard and it will end up being a mission safety network. the network must be mission critical at the outset. under the chairwoman first net has sought greater input from
the public safety advisory committee and ingay marriage -- engaged far more than previously. it is a 40-member group that is giving us information on public safety. the committee meets several times a year including once this past year in norman oklahoma near by home town. we believe that public safety ongoing input is vital at all stages of the network's development so it will be tail tailored to meet the end users. the ifc and public safety in general are pleased with jeffrey johnson as vice chair of first net. he is a well recognized in the fire and emergency committee.
we believe first net has worked to create opportunities for the public safety community and help shape the design of the network in states and territory. this outreach improved over the years and we look forward to that continuing. this is a key element to success and a venue where public safety personal are able to ensure first net is meeting our needs. first net has made strides with states conducting more than a hundred engagements involving 20,000 stakeholders. many members attended and reported favorable on the first net engagement. i understand that first net
intend do is hold meeting with the remain states by the end of the year. there is still gaps during the in-person meeting on the final network will look like the cost, and the coverage areas but these are the exact type of questions that should be and are being asked and debated. public safety must be included in the conversations and we appreciate the engagement with public safety commitment. there is a lot of work to be done and first net must move quickly on sever activities in 2015. these and other developments from the past year help foster a more inclusive, transparent dialogue between first net and the public safety community. first net is needed to the crease the safety of the emergency personal and protect
the american people. first net isn't the only thing that bears success. it falls on all public safety officials to ensure success in the creation and administration of the broadband network. i feel confidant first net is on the right path to build a broadband nation that will serve firefighters, emergency medical providers and other responders. i appreciate the opportunity to be before you and offer this testimony. thank you, sir. >> thank you. mr. goldstein? >> i am pleased to be here to talk about first net. we are tasked with a wireless broadband net specifically for emergency safety. the finings are preliminary in nature. the 2012 act provided $7 billion from spectrum auction proceed
for the network construction and required to be self-funding beyond the allocation. we worked with five building projects that had permission to build networks. first net's progress of responsibilities and establishing controls and how much the network is estimated to cost and how they plan to be self-funding and what lessons can be learned from the early building projects. first, we found first net has made progress with the responsibilities established but lacked internal controls. they made progress establishing structure, planning the nationwide broadband network and consulting with stakeholders but they have up coming issues saying the level of coverage will be difficult to address and carry out responsibilities.
internal controls they have stb established policies but not assessed the risk. given first net faces multitudes of risk assessing them would help them respond to risks in a proactive way developing standards of contact would hem them address conduct issues in a timely manner. second, it is estimated to cost billions and first net faced the difficult decision determining how to fund the network's construction and ongoing operations. various entities estimated the cost from $12-$47 billion over the first ten years and the actual cost is influenced by the business model, extent of commercial preps, use of existing network and network coverage. the cost would likely increase
if they don't utilize commercial partnerships. they can use secondary use of the network for non-public safety networks put it is difficult to determine how to best use the sources. wide spread coverage attracts user buzz it is expensive to construct and maintain especially in rural areas. we found that first net has taken steps to collect and evaluate information from the five early builder projects. but it could do more to evaluate and incorporate the investments. they have assigned contractors to collect and log lessons.
preliminary results so first net doesn't have a plan how it will evaluate the experiences and lessons. they have found a well developed evaluation plan can help ensure the agency obtain the information necessary. given the early builder projects are done at a local and regional level what first net must do nationally this can play a key role in the management and planning, feedback on execution making sure they have not missed opportunities. this concludes ply remarks and i would be happy to answer remarks >> thank you. ms. swinson. >> thank you for inviting me to testify on behalf of the first responder network authority.
this is also a pleasure to appear with my fellow panel members and i would like to welcome several members of the public safety community who are with us here to hear about their network. i appreciate everybody coming with us today. as you know we experienced growing pains in the early days of our existence. with only board members on the first net until mid-2013 and an executive team not in place until the latter part of the year we were dependent on other supports and worked to shore up weakness and take on as much responsibility as we can. and i am confidant the processess and procedures are in line with expectations. with the executive team in place we build a strategic road map in march of 2014 and have been on pace with major milestones
since. we started the formal meetings and the first public notice and comment in september of 2014. on monday we released the second public notice and comment. and the board is on track to address the draft rfp later this month. we have had outreach meetings since the beginning cuonnectconnecting first net with stakeholders. we scheduled meetings with an additional 28 states and held a variety of forms beyond this meetings with single points of contact in the state with week leo mails, monthly phone calls quarterly webinars and upcoming on april 14th and 15 we will host an inperson meeting where we are going to have 56 states
andsial point of contacts attending if they can make it. i am very proud of the organization and what it has accomplished and where they are in terms of readiness. it is a dedicated and committed team working on a project that faces head winds each and every day. what no one sees is the toll thes this takes on the organization and the people working in it. at first net we are taking on this task to deploy a nationwide network and we are constrained by a number of factors that are out of our control. coming from the private sector i have found the federal rules and processes challenging at time. this slows the process to move as we and others would like.
i know there are some who would like to see more progress at this point. i would, too. but we are a federal entity and subject to regulations. so i hope you understand why we may not be moving as quickly as everyone expects. we looked at cycle times and committing the necessary resources within the department of commerce to make the improvements. we appreciate the support. we are explayeroring the hiring process and procurement. i believe that having people dedicated to whose functions whose first priority is first net will enable to move it along quickly and eefficiently and adhere to the rules.
we are working to build a culture that is appropriate to serve the community. our first responders are on duty 24/7 and we need to be there to support them. this means working a laser focus commitment to serve and have a sense of urgency. we have accomplished a lot and are building a reputation to do what we see we will do. we have more to complete but i believe we are on the right path with a dedicated team working on the mission. thank you for allowing me to be here. >> thongank you. >> we appreciate the opportunity to testify as we examine first net problems and challenges in establishing the broadband
network. this act authorizes first net to use public money to build a pub public safety network making internal control and the compliance important. it is critically important for the feminist first responders to have the ability to connect quickly. on april 23 2013 first net meeting a former board member presented a resolution regarding decision making and concerns including including including including ethics and procurement. we looked at board ac-- access
to information. the previous board chairman asked my office to look into ethics and procurement. first net didn't wait for the report to make changes. they hired a chief council, established a compliance program, and worked with our office develop a training program for board members and staff. the results of the audit disclosed problems. we found public and financial monitoring proceeder were not adequate, some board members didn't file timely disclosure reports and monitoring of potential conflicts of interest needed improvement. we found one now former board member didn't file a public financial disclosure record and when he did he didn't disclose a significant interest or position
in a conflicting company. another now former board member submitted a financial disclosure five months late. we consider this an important issue for internal control because the mission and membership of the board includes close ties to the telecommunication issues. in procurement we found first net contracting practice lacked sufficient hire competition, and adequate monitoring. we found an 8.4 million contract was not adequate and a former board member inappropriately directed the contractor in advance of the award to hire specific individuals. this created the appearance the contractor was required to hire the individuals in order to get
the contract. close relationships with contractor personal can show favortism and call into the questions the procurement process. we made nine recommendations and some have been implemented and we continue to work with the department on the following. our recommendations were taken serious and progress has been made but significant challenges remain. the areaed we have identified as watch items which are well known to first net include the following. ensuring funding, determining the assets incorporating lessons learned from the broadband technology opportunity program, continue to address and identify internal control weaknesses and executing the consultation process.
we are continuing to oversee first net and will keep them informed with respect to these challenges and others identified. the act did not authorize first net to be dedicated to oversight so as a result over the past two years we have been working the department on funding the oversight and the 2016 budget request is an appropriation for work but the committee might want to see if it is appropriate to authorize it from the funds. this concludes my testimony and i am pleased to answer any questions >> thank you for the panel for your great comments. we will look forward to asking a few questions and try to confine to members of the committee. i will start off by asking you ms. swinson. rural america is not allowed to
be left behind in deploying first net and my question is how do you plan to ensure more states are adequately covered? >> thank you for the question. as you know with discussions with your office and other members we take rural coverage seriously and it is as high of a priority as urban. and this is what makes the difference. commercial doesn't cover rural. >> >> hough -- with the single point of contact to plan those meetings, then given that opportunity to tell us where their priorities are. that is why we have to go
into those consultations and meetings with sen we will feed into the rflp process says the response mechanism for the vendors who are responding to this how they will do that coverage and at what cost. is a critical components and again it is important to understand this is what differentiates us. >> talking about the rfp it has been going on for about a decade but i think ever ready is concerned if rfp does not move forward soon then they could lose confidence and that could be a to pinpoint with regard to future success and viability so you mentioned earlier in your testimony by the end of
the month? directed draft i will clarify. and the like to talk about the fact we're on track with the strategic road map. by the end of the month to consider for issuance. the vendors want to know for the offenders to give feedback about how that is issued and so every issue that final rfp we won't experience unintended consequences. we're on track to issue that with all the of milestones from over one year ago. >> with that calendar year?
>> are there factors? >> i am not aware of any. internally be believed that is the case and based on that vendor community it may extend a little bit but it would be well worth the time so it is done right in defectively. the rfp is the pivotal part of the program not only deploying the network but monetizing the excess capacity in the spectrum. it is a complicated process. it is pivotal for the program. >> five understand first that has not determined how to build up these projects and how they are incorporated in various
factors could affect that determination and so could you elaborate or perhaps go beyond that to recommend what steps and firstnet could take to address those? >> what they need to learn about with they include governance and conducting not reach for deployment all those have tried to develop options as they proceed on their own. they have looked at some of those projects but not in a way that we think with the of full-blown the valuation. to allow them to use that information down the road to get the milestones and use that information to make
changes themselves in their own development as time goes forward. we think they can do a better job in that area may be doing everything at once it is difficult but to achieve success is critical to obtain as much reformation from as much as they can. >> you identified firstnet in your office released a report with concerns whether your biggest concerns going forward? >> the concern going forward readers the issues you raise in your statement there are many unknowns below we focused on so far is with the personnel m policies
their procedures. >> are you satisfied firstnet that implemented the recommendations. >> we issued nine recommendations for the chairman of firstnet in the senior procurement officials they're all being implemented. >>. >> the reason for firstnet to have all first responders to talk to each other even without those hindrances as the matter of national security or emergency.
in front of us. thank you for what you're doing. we knew the mission would not be easy. you have seen the disaster is in the past. was set of radio cannot talk to the others. but the stakes are way too high. so we task you all with creating from scratch the interoperable nationwide network devoted to public safety. so you are a unique hybrid. we have vast the board to think like an entrepreneur with a limited budget to launch a start of enterprise within the confines of the federal government.
that is a huge. so set up through 2012 then you have no employees and half to do all that the launching with the urgency the legislation gave it three years ago, you certainly have chronicled the problems along the way. with cybersecurity is the essential component of firstnet day mission critical network and has to be a target for the bad guys. so we required with legislation you consider cybersecurity.
what steps are you taking with the nationwide network? and then with the department reviewing the first deaths with cybersecurity protections? and what you do about it in the future? >> it is said challenging area with large companies around the u.s. but we are collaborating with the department of homeless security as it is built into the technical planning because we're leveraging the resources appropriately. but it is a high priority
for firstnet. >> will you have enough money? stick it is too early to answer that specifically we just are looking at the planning process. to find data fitted sufficient to build up the network so to incorporate that into the financial model. but like everything we do with firstnet it is all new. there are things we have actually changed. in to keep you posted on how we're doing got. >> thinking is essential to harden against cybersecurity because when it is not a
natural disaster whoever is attacking us will attack us with cybersimultaneously. what will you do? finigan is a high priority that needs to be addressed so just to make sure that the firstnet team has all they need so to work period in hand to make sure they have the resources from across the of federal government. i think many if you are familiar with the framework with a number of experts involved with the of secretary lew as well. >> it was missed you will need to work with them and intelligence agencies
because the technology is so rapidly changing in these areas. with the sophisticated attacks that can occur for pro if we're talking about a terrorist attack then you'll have to be able to communicate on your network. and of course, that is what the bad guys will try to deny to communicate and command. >> we appreciate why we need this the number of years ago we had an incident in new hampshire that prompted an early discussion about this
we had a horrible madman who basically murdered a judge judge, troopers in the a local newspaper person in the radios did not talk to each other which was the advantage of the perpetrator to cause more deaths. this is a real issue. sova 29 diagonal is the date set to get the feedback from the space and two-thirds would be the role areas to have challenges how we build the network to talk to each other. in the process and then put
together the rfp by the end of the year will the states have a feedback loop? they tell you what they think then you put together the rfp is there another opportunity to see what you are working on? >> thanks for the question now want to emphasize that consultation is a broad and ongoing process. store but we try to accomplish the relationship is ongoing with conference calls, available by staff, emails, a face-to-face meetings, as you go through the process of rfp to deliver a plan
that will not be a surprise. we wanted very collaborative process so we are so involved and that is the mindset of around the process. it is very important we are limited on staff but adding people to make sure we have the right number so we can be effective with the information we are providing new. >> what we're hearing for feedback is they are saying what is the benefit? the local agencies working on this issue for years it is a new issue for law enforcement why should we opt into firstnet with the distributor the part of the
plan with maximize commercial opportunities given the resources that we have. so because you are so new you don't know what to expect? this is curious what you would say. >> this is why with as much of the constituency i go to my local or she store. it is a lot of people out there. >> but we're working very hard to get the information about.
when i try to communicate why should we do this purses that? is the of coverage said is the critical differentiator the is of a dedicated network but what happens when you have an incident? you get on your cell phone stick without role coverage to do it easily commercially. >> it is more than that because commercial is focused on a commercial for pro with earnings release says but the money we get we will reinvest into the network. sova of funding that we get we have spectrum that is very valuable.
so getting a the revenue from that along with the user fees to operate the network. so with first responders we talk about the recapitalized business model. look today the system is 10 or 15 years old. so the model we have is upgrading as technology to present itself. slippery move up to 5g than we will deploy 5g. we will get the first responders'' we enjoy today as it evolves. we're also going to work with the standards but the
network for circumstances in your state. we want to understand what the circumstances are in working to define the standards to harden the network to withstand the incidence -- incidents to affect the network. so they will get excited about those applications it is dedicated to public safety is primary not secondary. i know where the priority is. to respond to shareholders every quarter. it is important to note even if you decide to let us deploy your network instead of building your own the public safety agencies are
not obligated to sign up. there isn't the mandate that they have to. we have to create a value proposition to give more value than they have today. that is why we stand on -- spend so much time for what they want to use. and we're working very hard for that information working hard to get more information into the people on the street it is very, very difficult we ran at the meeting in san diego last saturday. law enforcement was not that familiar with firstnet but we presented at the leading to educate 150 people and working very hard to get the message out and we're open to suggestions.
>> i want to say thank you for the work you are doing per you have been tasked to do something that is unprecedented that is extraordinary and urgently needed. all of us know the urgency for this. spending eight years as the mayor after crisis after crisis after crisis and they could attest from their experiences that sweater going into a burning building with no visibility how important is the radio to communicate externally. hurricane sandy we saw in most painful ways how critical communication was.
we even had an earthquake in new jersey so all communications police department, fire department everything went down. fortunately we had a plan but this is really what you we're doing. you were making strides that should be celebrated in my stay is a static and no bite to submit for the record an article about atlantic city about the public safety work you we're doing their. which can be rolled out in a crisis. as a model for the nation.
or suburban areas. they worked through bureaucracies better not used to dealing with this public-private partnership that you have. some respect of those professionals who have done the work of oversight. but i want to afford to a couple of opportunities of the challenges you put for word pro for your constructive criticism how you deal with the challenges the undermine your progress. for those who like to remove barriers it is one of the most righteous but led a major crisis happened to this country you could make a difference for thousands of lives suggest talk about
those obstacles you are in countering and how we could do something for you. >> we are working with bruce sanders to improve the process within the department so set aside those federal regulations there is a lot of people we need to streamline that. we have the ability to control our destiny to have people that are dedicated as the of main priority that firstnet is secondary they have a day job then put
firstnet on top of that we -- they don't have the urgency that we feel so to take responsibility for those functions i think we would have an opportunity to move more quickly. so to take responsibility until such time we are prepared but already with the finance organizations reaction lead to a lot of that work ourselves and have demonstrated the right resources and talent that would cause stiefel to feel confident. >> i would like to submit more in detail but i want to end by saying as we elevate
as senators consistently but i want to get a chance to respond to the cost issue with that self funding mechanism is that sufficient ? >> where is important to understand the information has a lot of assumptions and even mr. gold scene indicated that. that he did not even have visibility so building that financial model we believe but we need to accomplish in order to make it a self sustaining network that is why the rfp is such a critical component that is the funding mechanism although it is a lot of money it is not sufficient to upgrade the network over
time. i believe the model is solid but we won't know the answer and tell we finish the of rfp process for but that is critical to put together a plan for each of the governors for the coverage we will provide and what it will cost the first responders. we don't know that until the are of the is completed. thank you. >> mr. chairman want to thank you for what you we're doing. firstnet is important for all of us. i came into the office early 2005. so with those tragedies we
can get the equipment to the right place and time. we put the interoperable radio system in we're one of the state's east of mississippi but that being said it is important. i would ask also thank you for the conference that you attended for the first responders. the above will get us in business right now we don't see any action. >> he manages the grants. [laughter] >> there are two rounds of money with the implementation grants.
the round two is somewhat dependent with firstnet the first round window for consultation and planning to allow the states to do the work as part of the first round. so we're in the process. >> every state will be different. i am sorry we are low on time. and every community building we got internet into every nook and cranny in west virginia but it hasn't been possible for the private sector with the customer base but it would be easy to book off of that for those critical areas of first responders.
so it could be quicker if they fast-track. >> we suspect to have that second phase go out. >> . . ous issues with hiring processes, appears to be more lawyers and lawyers -- layers of bureaucracy and more red tape that annual report which was due february 23 still has not been released because it has to be reviewed. i'm told by 10 different federal agencies before could be even shared with the first responders who it is designed to serve. is all of this new two u.? >> yes sir i'm not aware of that. >> you are